Prime Minister Benjamin Netanyahu is ready to call early elections amid a coalition impasse over next year's budget, according to an official in his office, speaking anonymously as he wasn't authorized to address the matter.

The prime minister will make an announcement at 8 p.m. local time today, his office said in a text message. The announcement comes "after a round of consultations with the heads of parties in his coalition," according to the message. It gave no further details.

Dissolving the government in the coming days would mean early elections in January or February. A vote must be held no later than a year from now.

Netanyahu has been meeting this week with members of his coalition in an effort to reach an agreement on the 2013 budget. He has been calling for deep cuts to stay within the targeted deficit and is facing opposition from coalition members who are reluctant to reduce spending.

"Netanyahu sees that the polls are in his favor right now, and if he's having trouble with the budget this would be the best time for elections rather than waiting another year," said Mark Heller, senior research fellow at Tel Aviv University's Institute for National Security Studies.

Poll Frontrunner According to a poll published by the Haaretz daily on Sept. 28, Netanyahu's Likud party would win 28 seats in the 120-seat Knesset, one more than it currently holds, making it the largest faction in parliament. The survey also showed 35 percent of Israelis see him as "most suited" to lead, almost double the 16 percent of his nearest contender for the premiership, Shelly Yacimovich of the opposition Labor party.

Israel must cut next year's budget by about 17 billion shekels ($4.4 billion) to stay within fiscal limits as it faces a possible deepening of the European financial crisis, Bank of Israel Governor Stanley Fischer said in August. The government deficit was 4.1 percent of gross domestic product in the months through August, more than double the original target for 2012, the Finance Ministry said on Sept.

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The government already has approved higher taxes beginning in 2013 to help meet next year's revised deficit target of 3 percent of gross domestic product.

Early elections would come amid rising tension between Israel and Iran over the Islamic Republic's nuclear program. Netanyahu said at the United Nations on Sept. 27 that "by next spring, at most next summer," Iran will be in the final stage of having enough enriched uranium to make a nuclear weapon. Israeli leaders have said that "all options are on the table" to prevent that from happening, including a military strike.

"I wouldn't link Netanyahu calling early elections to any decision on Iran," Heller said. "While I don't think he's looking at the military option right now, if he was then holding elections also wouldn't prevent that." --With assistance from Udi Segal in Jerusalem. Editors: Louis Meixler, Francis Harris.